Remarketing

Used Trucks Remain a Buyer’s Market

Used Class 8 truck prices stayed flat last month and July proved to be the worst month of the year so far for sales, according to ACT Research.

Photo: Evan Lockridge

Used truck prices stayed relatively flat in July but remained at favorable levels compared with the same month a year ago, according ACT Research.

The average price of a used Class 8 truck was down 1% from June according to the State of the Industry: U.S. Classes 3-8 Used Trucks report published by ACT Research. The report also found that same dealer volumes rose 12% year-over-year while average age declined 5% over the same period. In the short term, dealer sales volumes fell 7% and July was the weakest sales month of the year in 2018.

Retail and auction markets were down from June while sales were up through the wholesale channel. With a longer view of 12 months, retail and wholesale markets were up 18% and 3% respectively while the auction channel was down 10%.

“Dealers are reporting that the used truck market is strong,” said Steve Tam, vice president at ACT Research. “Dealers are having a hard time finding used trucks to sell, which is supporting used truck prices. The strong market has also been a boon to finance companies actively looking to finance used trucks.”

Prior to 2018, sedans at auction had experienced three years of consecutive value declines. For sedan-heavy fleets, this may have meant an impact to total cost of ownership for those vehicles, as profits from remarketing them would have suffered. Now companies with sedan-heavy fleets may be finding that a window of opportunity to remarket those vehicles for better profit has emerged.

Used-vehicle auctions have started resuming regular business hours following the effects of Hurricane Florence, which had less of an impact on the U.S vehicle market than Hurricanes Harvey and Irma in 2017.

Used vehicle sales continued their strong performance in the wholesale market in July, as an "abnormal bounce" that began in June continued to show strength with overall values increasing in July 1.51% from the prior month, according to Manheim.

Off-lease fleet vehicles sold in the wholesale market at auction fell 1% in value in June from the prior month but increased 7% from a year ago, according to Tom Kontos, KAR Auction Services' chief economist.

Used compact vans and several categories of crossovers increased in value in wholesale sales, while luxury vehicles made up seven of the 10 lowest performing categories among 2013-2017 vehicles in May, according to Black Book.

Off-lease vehicles from fleet consignors in the rental, commercial, and government sectors increased 2.3% in April from March and increased 5.8% from a year ago, according to analysis from KAR Auction Services.